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Impact of Microfinance on Smallholder Farm Productivity in Tanzania: The Case of Iramba District

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  • Frank Girabi
  • Agnes Elishadai Godfrey Mwakaje

Abstract

Over the past two decades, there has been a high promotion of microfinance institutions (MFI) in Tanzania. In 1990s there was only 825 MFI which increased to 1,875 in 2005. Currently, the country is estimated to have more than 5000 MFI. The promise of MFI lies in the belief that microfinance could empower poor people to fight against poverty through easy access to credit. But what is the actual impact of MFI on the ground? Empirical evidence in this area is inconclusive. The objective of this study was to investigate the impact of microfinance on agricultural productivity by smallholder farmers in Tanzania with the case study of Iramba District. A total of 98 respondents were selected randomly from credit beneficiaries (CB) and non-credit beneficiaries (NCB). The collected data were analyzed through descriptive statistics and multiple regression analysis. Findings revealed that, CB realized high agricultural productivity compared to the NCB respondents. This is partly because the CB were relatively better in accessing markets for agricultural commodities, use of inputs and adoption of improved farming technologies. The major factors hindering smallholder farmers’ access to credit were reported to be lack of information, inadequate credit supply, high interest rates and defaulting.

Suggested Citation

  • Frank Girabi & Agnes Elishadai Godfrey Mwakaje, 2013. "Impact of Microfinance on Smallholder Farm Productivity in Tanzania: The Case of Iramba District," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 3(2), pages 227-242.
    • Handle: RePEc:asi:aeafrj:v:3:y:2013:i:2:p:227-242:id:988
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    Citations

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    Cited by:

    1. Mwaka Kayula & Collins Otieno Odoyo & Chanda Sichinsambwe, 2022. "Effects of Crop Insurance and Finance on Small-Scale Maize Productivity in Zambia," International Business Research, Canadian Center of Science and Education, vol. 15(10), pages 1-48, October.
    2. Md. Alamgir Hossain & Mohammad Abdul Malek & Zhengfei Yu, 2023. "Impact of Rural Credit on Household Welfare: Evidence from a Long-Term Panel in Bangladesh," Asian Development Review (ADR), World Scientific Publishing Co. Pte. Ltd., vol. 40(02), pages 363-397, September.
    3. Adam Malla Issiou & Jacob Yabi, 2023. "Determinants of social norms and support services for the entrepreneurial spirit of rural farmers in sub-Saharan Africa: The case of Borgou in Benin [Les déterminants des normes sociales et des ser," Post-Print hal-04256003, HAL.
    4. Faraja N. Mpeku & Justin K. Urassa, 2022. "Access to Bank Loans and Smallholder Farmers' Paddy Productivity; A case of Mvomero District, Tanzania," International Journal of Science and Business, IJSAB International, vol. 15(1), pages 65-78.

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